TSX hits record-high close on U.S. data, Fed comment

Leah Schnurr, John Tilak

3 Min Read

TORONTO (Reuters) - Canada’s main stock index had its highest close on record on Wednesday, boosted by positive U.S. economic data and the Federal Reserve’s commentary on the outlook for monetary policy.

The U.S. central bank, which indicated that it was in no hurry to raise interest rates, cut its monthly asset purchases and looked on track to shutter the program this fall. The Fed also noted that it is paying attention to a decline in the jobless rate.

The U.S. economy bounced back in the second quarter with growth of 4 percent, recovering from a decline in the first three months of the year.

While Canadian economic growth has been lackluster, a stronger recovery in the United States, its biggest trading partner, is seen as ultimately benefiting Canada.

The day’s gains saw the index notch another record, adding to a recent string of highs that have seen Toronto stocks rise more than 13 percent in the year so far.

“The broader macro theme – a stronger U.S. economy through the first half of the year – is very supportive, together with a very patient Fed that’s still got its eye on slack in the labor market,” said Fergal Smith, managing market strategist at Action Economics.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 78.27 points, or 0.51 percent, at 15,524.82. Eight of the 10 main sectors on the index were higher.

Cenovus Energy Inc (CVE.TO) was among the stock index’s most influential gainers, rising 2.4 percent after the independent oil producer said its second-quarter profit was helped by increased production at an oil sands project. The stock was up at C$33.61.

Among other companies reporting quarterly results, MEG Energy Corp (MEG.TO) swung to a profit from a year-ago loss and raised its annual production forecast. MEG’s shares were up 3.3 percent at C$38.98.

On the downside, Penn West Petroleum PWT.TO was the biggest laggard, tumbling nearly 14 percent after the company said it would have to restate some of its financial results. The stock was down at C$8.57.